Answer to Question 1
Shock therapy proved to be too much too fast for the Russian people. Former members of the Communist Party resented the loss of their jobs and privileges. Poor people living on fixed incomes struggled to survive high prices for basic necessities. A new consumer-oriented society developed along class lines. Unemployment and homelessness increased, and the gap between rich and poor widened. There was a bewildering explosion of new goods and services that most people simply could not afford.
Rampant black marketeering developed. Although much of this exchange was illegal, there was a general tendency to overlook such transactions because they were essential to the economy. Wide- spread barterthe exchange of goods and services instead of cashresulted from the declining value of Russia's currency, the ruble. Many people resorted to selling personal possessions to buy high-priced food and other necessities. Most Russians grew economically worse off. Many privately owned industries were too unproductive to pay their employees, or else they paid workers under the table to avoid taxation. Unpaid workers could not pay taxes to the government, of course, and workers paid under the table had no incentive to pay taxes. Russia's gross domestic product plummeted, shrinking by almost half in the 1990s.
Answer to Question 2
C
